Cargo Business Newswire Archives
Summary for June 1 through June 5, 2015:

Monday, June 1, 2015

Pasha finalizes acquisition of Horizon’s Hawaii business

The Pasha Group completed its acquisition of the Hawaii trade-lane business of Horizon Lines on Friday, according to a company statement.

Pasha Hawaii assumes operations for all of Horizon’s Hawaii business, including its four U.S.-flag container ships serving the Hawaii trade lane. The Pasha Group has also purchased Horizon subsidiaries Hawaii Stevedores; the California-based operations of Sea-Logix, LLC, which provides trucking services; and Sunrise Operations, a subsidiary that includes Horizon’s Hawaii trade-lane vessels and employees.

Horizon’s Hawaii business will operate alongside Pasha Hawaii’s existing operations, which include Pasha’s two Jones Act-qualified vessels, the M/V Jean Anne and the new M/V Marjorie C, which entered service on May 7, 2015. Pasha says the acquisition will allow the company to offer a wider range of shipping and logistics services for dry and refrigerated containers and a variety of roll-on/roll-off cargoes.

Pasha Hawaii’s technical services team will oversee operations for its entire fleet, with Crowley Maritime Corporation providing ship management of the new Horizon vessels and crew through Crowley subsidiary Marine Transport Management, Inc.

Pasha has engaged Norton Lilly to provide certain liner agency services, both in Hawaii and the Mainland. The company will continue its long-time partnership with Young Brothers to maintain connecting-carrier service to the Neighbor Islands.

The Pasha Group, one of the nation’s leading Jones Act shipping and logistics companies, has served the Hawaii market for more than 50 years, adding roll-on/roll-off liner service between the Mainland and Hawaii in 2005.

Union Pacific furloughs 900 workers on low volume

Union Pacific has furloughed a total of 900 employees and put up 800 locomotives due to lower shipping volumes, CEO Lance Fritz told the Wall Street Journal.

Fritz said the slump includes a 25 percent reduction in coal shipments from last year as more power plants switch to natural gas, a trend that could continue for the remainder of the year.

The Omaha-based railroad had furloughed 500 people and idled 47 locomotives in April.

The temporary furloughs are for an indefinite period, company spokesman Mark Davis said. Some furloughed workers receive no pay or benefits. Others work and train part time and maintain their certification so they can be called back to work more quickly.

In 2009 the company furloughed as many as 5,300 workers because of the economic recession, Davis said. Last year Union Pacific expanded its transportation workforce and added 822 locomotives as cargo volume increased 7 percent, improving service levels dramatically, Fritz said.

He also said that railroads are working to install the rail safety system called positive train control, but won’t finish installing it by this year’s deadline. Union Pacific has spent $1.7 billion on its share of the system and will spend an additional $800 million to complete its installation.

For more of the story:

ICTSI takes over $54M Mexican port project

Philippines-based International Container Terminal Services Inc. (ICTSI) has taken over a port project in Tuxpan, Mexico in an effort to expand its presence abroad.

ICTSI treasury head Arthur Tabuena told the Philippine Stock Exchange that ICTSI is acquiring 100 percent interest in Grupo TMM, SAB and Inmobiliaria TMM, SA de CV in Terminal Maritima de Tuxpan, SA de CV. for $54.5 million.

The company was awarded a concession to construct and operate a maritime container terminal in the Port of Tuxpan.

"The rationale for the transaction is to continue to expand the business, diversify geographically, and to support, participate in, and benefit from, the positive economic development in Mexico," Tabuena said.

ICTSI purchased 147,688 shares of Terminal Maritima de Tuxpan at $369.02 per share. Company chairman Enrique Razon said the company is looking at ports in Kenya, Mombasa and in Cameroon. He said the port operator has earmarked $530 million for its capital expenditures this year after booking a six percent growth in earnings last year.

The capital funds are intended to complete the development of the company’s new container terminals in Mexico and Democratic Republic of Congo, expand capacity at its terminal operation in Manila, and start the development of new terminals in Iraq and Australia.

ICTSI is investing approximately $140 million to complete the first phase of a joint venture container terminal development project with PSA International Pte Ltd. in Buenaventura, Colombia where it invested $64.7 million last year.

This year’s budget is 71 percent higher than the $310 million allocation for capital expenditures last year. Of the entire amount, ICTSI said it was able to disburse only 90 percent amounting to $279 million.

For more of the Philippine Star story:

Alibaba logistics division to expand warehouse footprint

The logistics subsidiary of Chinese e-commerce giant Alibaba Group Holding is planning a major warehouse expansion to streamline deliveries across the country, devoting a large part of long-term $16 billion investment plans to adding new space.

The logistics business, called Cainiao, will increase warehouse space it owns now fivefold to around 54 million square feet next year, President Judy Tong told an interviewer last week.

Founded two years ago, Cainiao seeks to give Alibaba a driving role in China's fragmented package delivery industry. In partnership with delivery businesses, it crunches data on everything from order trends to delivery routes and weather patterns to increase efficiency.

"People may think that an Internet company shouldn't have property but Cainiao cannot just be a pure data company," Tong said, referring to Alibaba's ownership of warehouses. "It has to be an integrated company with data and an efficient logistics network. An app can't solve the problems of logistics."

Cainiao's warehouse space will be concentrated in eight to 10 cities and form the top tier of a network of warehouses. The lower tiers of this network will be entirely run by Alibaba's partners and businesses that sell on its platforms.

Tong said the crowded courier industry would likely face consolidation in the coming years with about three leading companies. A subsidiary of Fosun International Ltd. bought a 10 percent equity interest in Cainiao, formerly known as China Smart Logistics Network, when it was founded.

In early May Alibaba took a minority stake in YTO Express (Logistics) Co., one of Cainiao's 14 logistics partners. Tong said there were likely to be similar investments in the future.

Dead body found at Port of Houston after floods

A body recovered at the Port of Houston Thursday night is that of an elderly man who was swept away by floodwaters earlier this week, according to the U.S. Coast Guard.

According to the city of Houston, the body has been identified as 87-year-old Howard Alter.

The U.S. Coast Guard said a good Samaritan came across the body in the Houston Ship Channel Thursday night.

For more of the story:


Tuesday, June 2, 2015

Cargo Business News partners with Nasdaq’s GlobeNewswire

Nasdaq Corporate Solutions welcomed Cargo Business News to its GlobeNewswire press release distribution network, featuring the display on its Times Square tower in New York City on Thursday, May 28.

Under the new partnership, GlobeNewswire will add to their client reports. GlobeNewswire is a Nasdaq subsidiary specializing in the delivery of corporate press releases, financial disclosures and multimedia content to the media, investment community, individual investors and the general public.

XPO Logistics to raise $3.2B for more M&A

XPO Logistics will raise $3.26 billion through new equity and debt, partly to fund acquisitions, according to insiders familiar with the matter, just one month after a $3.53 billion deal to buy French logistics firm Norbert Dentressangle SA.

The capital raising highlights XPO's intention regarding more mergers and acquisitions after the deal with Norbert Dentressangle gave it access to Europe's largest logistics fleet network, as well as a fresh backlog of acquisition targets.

A consortium of 15 investors that include Singapore's sovereign wealth fund and Canadian public pension funds, Ontario Teachers' Pension Plan and Public Sector Pension Investment Board have agreed to provide $1.26 billion to XPO by acquiring 28 million of its shares, equivalent to 21 percent of its common stock, at $45 per share, the people said on Sunday. XPO's shares closed at $49.16 on Friday.

XPO will also begin to market an issuance of $2 billion in high-yield bonds, the sources added. XPO is expected to announce both the equity and debt offerings on Monday, they said.

While some of the new funds will be used to finance the Norbert Dentressangle deal, XPO will also use part of the money for new, unspecified acquisitions, the sources said. The acquisitions could be up to $3.75 billion in size, one of the people said.

The sources asked not to be identified ahead of XPO's official statement. A representative for XPO declined to comment.

Based in Greenwich, Connecticut, XPO is a provider of contract logistics, freight brokerage and global freight forwarding services to retailers, manufacturers and e-commerce companies among others.

For more of the Reuters story:

CN invests $16M to expand reefer capacity

CN Railway announced a $16 million investment in the expansion of its cold supply chain capacity to help producers and distributors of chilled or frozen foods grow their businesses in North American and overseas markets.

"CN was the first railway to introduce highway-to-rail conversion of reefer service in transborder markets," said J.J. Ruest, executive vice-president and chief marketing officer. "Our high-quality cold supply chain service has been embraced by the marketplace.  We are now adding capacity to grow and help Canada's food processing industry gain and maintain access to new domestic and international markets."

To accommodate growth, CN said it is acquiring 200 more domestic, 53-foot temperature-controlled containers, which will add to the current fleet of containers circulating inside North America. The railway is also acquiring 32 electrical generators to move 40-foot marine reefers to and from CN-served ports on CN intermodal trains. The power-packs provide economies of scale by connecting up to 17 international marine reefers at a time, the statement said.

CN, in collaboration with other railroads, offers cold supply chain rail services between Canada-United States-Mexico, as well as between Canada and overseas markets.

UASC launches Europe to U.S. East Coast service

United Arab Shipping Company recently announced the launch of a North Europe – U.S. East Coast (NEU1) service, as well as an order of 3,500 reefer containers.

UASC says the new NEU1 service is part of its network to provide customers with worldwide transportation access and reach. The service consists of a weekly sailing making five direct port calls in North Europe to the principle ports of Le Havre, Antwerp, Rotterdam, Southampton and Bremerhaven and four direct port calls on the U.S. East Coast ports of New York, Norfolk, Charleston and Savannah.

Following the recent delivery of 2,000 new reefer units, UASC announced an additional order of 3,500 reefer containers with reefer technology provided by Daikin. The order marks a milestone in the expansion of UASC’s reefer services, the company says, and highlights the company’s investment in high tech, energy-efficient solutions for the transport of frozen and chilled cargoes.

"The U.S. East Coast markets provide a significant opportunity for UASC and its customers and these new service offerings mark an important step in UASC’s evolution as well as giving a sense of our longer term aspirations," said Jørn Hinge, president and CEO at UASC.

Crewmember remains missing after towboat sinks

The Coast Guard is suspending its search for a missing crewmember aboard a tow boat that sank Saturday near Convent, La.

Coast Guard Sector New Orleans received a report that the UTV Miss Natalie capsized and sank near mile marker 163 on the lower Mississippi River around 8:00 a.m. with five people aboard.

Four people were rescued and one person is still missing. A search and rescue operation was underway including efforts by Coast Guard Air Station New Orleans MH-65 Dolphin helicopter crew and Port of South Louisiana divers as well as side scan sonar team.

"Based on several eye witness accounts…we have determined that the missing crewmember was onboard the vessel when it sank," said Cmndr. Kelly Denning of Coast Guard Sector New Orleans. "Pending further developments, we have decided to suspend the active search."

For more of the 4WWL story:


Wednesday, June 3, 2015

Maersk confirms $1.8B order for 11 Triple-Es from Daewoo Shipbuilding

On Tuesday, Maersk Line inked a new building deal with Daewoo Shipbuilding & Marine Engineering. The order is for 11 (plus 6 optional) second-generation Triple-E container ships at a capacity of 19,630 TEUs each, according to a Maersk statement.

The vessels will have a length of approximately 1300 feet, width of 190 feet, and a 54-foot draft.

The contract, valued at $1.8 billion, was signed by Sung-Leep Jung, president and CEO of DSME, and Søren Skou, CEO of Maersk Line, at a ceremony at Maersk Line’s headquarters in Copenhagen.

Maersk says this is the second new-building order in its investment program, following seven 3,600-TEU feeder vessels announced earlier this year. Over the coming five years, Maersk Line is planning to invest $15 billion in new-buildings, retrofitting, containers and other equipment.

"I am very happy with this order," says Søren Toft, COO of Maersk Line. "These vessels will help us stay competitive in the Asia–Europe trade and will be key in our strategy to grow with the market. It is the second order this year and we expect to order more vessels, which we can add to our fleet from 2017 and onwards."

Intended for the Asia-Europe service, the ships will replace smaller, less efficient vessels.

DSME has built all of the pioneering Triple-E vessels for the world’s largest shipping line. The last (out of 20) will be delivered in June 2015.

Maersk reports the 11 new vessels will join their fleet between April 2017 and May 2018, and will sail under Danish flag.

PMA accuses ILWU Local 34 of Sunday slowdown at Port of Oakland

The Pacific Maritime Association says that officials from the International Longshore and Warehouse Union’s Local 34 at the Port of Oakland refused to dispatch workers for the second shift on Sunday (May 31), causing the port’s terminal operations to shutdown.

A PMA statement alleged that the ILWU’s work stoppage occurred after the PMA told Local 34 officials this week that the new dispatch process would be put in place beginning with the second shift on Sunday. Its implementation was initially scheduled for the prior weekend but was postponed to the 31st by mutual agreement so as not to complicate dispatch during the Memorial Day weekend, according to the PMA.

The dispatch process outlines times by which labor orders must be placed.

According to the PMA, after the ILWU "failed to adhere to the new dispatch procedures" for vessel operations for the second shift on Sunday, the PMA took the matter to an area arbitrator who ruled that ILWU officials and dispatchers took unilateral action in violation of the agreement.

The arbitrator instructed the ILWU to accept and dispatch employers’ labor orders. The arbitrator also ruled that the ILWU reneged on an agreement to work around the dispute, the PMA said.

Negotiations for the new contract lasted for several months until an agreement was reached in February, and resulted in severe congestion throughout much of the U.S. West Coast.

"This is the third work stoppage caused by the ILWU in Oakland in just over a week," the PMA release said. "By sanctioning illegal work stoppages, the local ILWU leaders are not just violating the new contract, but are disrespecting the truckers, local residents and small businesses whose livelihoods depend on the efficient and reliable movement of cargo through the port."

"We have a new coastwise contract in place that was recently ratified by both parties, a new understanding in Oakland on dispatch and an arbitrator’s ruling finding the ILWU in violation of that new understanding," PMA spokesperson Wade Gates said.

"It’s time for the ILWU leaders in Oakland to recognize these facts, follow the provisions of the new agreement and join us in regaining the shipping community’s confidence in West Coast ports."

At the time of writing, ILWU Local 34 officials had not publicly responded.

The PMA reported that labor orders were properly processed for the first shift on Monday, and operations at the Port of Oakland were currently back to normal.

Global Grain Group to sign long-term lease at Port Metro Vancouver

Global Grain Group (G3), which is taking control of grain handler CWB, will sign a long-term lease at Port Metro Vancouver, facilitating the first new grain terminal there in nearly 50 years, according to an inside source.

The grain terminal would cost roughly $400 million and boost competition in the world's No. 2 wheat exporting country, as CWB becomes a stronger player against Richardson International, Viterra Inc. and Cargill Ltd.

New capacity to store crops at the port would also create opportunities to funnel more Canadian wheat and canola to Asia.

G3, a joint venture of U.S.-based Bunge Ltd. and Saudi Agricultural and Livestock Investment Co., will acquire the lease to West Lynnterm on the North Shore of Burrard Inlet, from Western Stevedoring, which currently operates a break bulk facility there, said the source, who was not authorized to speak publicly.

For more of the Reuters story:

China and Thailand make deal to build $28B Thai Canal

China and Thailand agreed at the end of May on a long-considered project, the Kra Canal (also called the Thai Canal), which would cut across the Kra Isthmus in southern Thailand.

The canal, expected cost $28 billion to build, will offer an alternative sea connection between Asia, the Middle East and Europe, bypassing the busy Strait of Malacca. The project will take about 10 years to complete, employ roughly 30,000 workers and will allow the passage of any type of cargo vessels up to ultra large crude carriers, or supertankers, the largest operating cargo vessels in the world.

According to Chinese media, a memorandum of cooperation between the two countries was signed in Guangzhou on May 15 to build the canal across the narrowest part of the Malay Peninsula as part of China’s New Maritime Silk Road initiative.

According to the plan, the canal will be built as a two-way, 82-feet-deep waterway between the cities of Songkhla and Satun, starting in Songkhla Lake, the largest natural lake in Thailand, and follow the route of Highway 406 that cuts across the peninsula’s interior mountain range. The canal will be 63 miles long and, at its widest point, span over 1300 feet in width.

The Kra Canal, which reportedly will be completely financed by China and mainly built by Chinese companies under the umbrella of the China-Thailand Kra Infrastructure Investment and Development Company, is a strategically important project for Beijing in terms of energy security and also in terms of its economic influence in Southeast Asia.

For more of the Gulf Times story:

Hundreds missing after ship sinks in Yangtze River

Rescuers searched on Tuesday for more than 400 people, many elderly Chinese tourists, missing after a cruise boat was hit by a freak tornado and sank in the Yangtze River — in what may be China's worst shipping disaster in nearly 70 years.

Divers and other rescue workers pulled out five people they found trapped in the upturned hull of the four-deck Eastern Star, a small fraction of the 458 people were on board when the ship capsized on Monday night, according to state media.

Rescue operations appeared extended late into Tuesday night with paramilitary vehicles, dozens of police and soldiers as well as medical and meteorological trucks surrounding the site.

Dozens of rescue boats battled wind and rain enveloping the southern section of Asia's longest river to reach the ship, which lay upturned in water 50 feet deep.

For more of the Reuters story:


Thursday, June 4, 2015

L.A./Long Beach losing market share in struggle to handle mega-ships

The wait at the Los Angeles and Long Beach ports has gotten longer and longer, decreasing their share of global trade, according to the Los Angeles Times. The ports are scrambling to respond to rapid changes in global shipping, especially the giant cargo ships that are backing up the docks with massive cargo volume. Labor strife has also played a role in the ports' shrinking market share.

The ports handled 39 percent of U.S. container imports in 2002; that fell to 32 percent by 2013, according to U.S. census data. They have lost business to rivals when global trade is booming and imports are rising at all ports, including L.A. and Long Beach.

"The dominance of Southern California as the Asia gateway is facing a lot more competition," said maritime consultant John Martin, who analyzed the trade data.

The ports of L.A. and Long Beach, which are in the midst of multibillion-dollar expansions to handle super-sized container vessels, are moving slower than some of their East Coast counterparts. Ports along the East Coast and in Houston have invested billions of dollars to deepen harbors, expand terminals and upgrade rail systems that connect to markets in the Midwest. The port of Savannah has more than doubled the volume of imported container goods over the last ten years, while the Canadian government and railways expanded the Port of Prince Rupert to become a direct competitor to U.S. ports.

"When you are No. 1 in the nation, everybody's going to come after you," said Gene Seroka, executive director of the Port of Los Angeles.

The quest for efficiency at sea has overwhelmed the infrastructure on shore. The average container ship being built now is nearly three times the size of the average ship a decade ago. The largest ships now calling at the Port of Long Beach won't even be able to fit through the newly widened Panama Canal in 2016.

Sixteen shipping companies operating in four major corporate alliances now control about 80 percent of the world's container shipping fleet, according to industry analyst Alphaliner. In the past, ships would arrive at a designated terminal with goods loaded in a particular order depending on destination. With the new alliances, containers from many different shipping lines are arriving at the same terminals — with their cargo stacked at random.

"It's all mixed up. The guys have to dig for things and find things," said Bobby Olvera Jr., president of the San Pedro chapter of the International Longshore and Warehouse Union. "No matter what we do here, we are trying to catch the cat's tail."

For more of the L.A. Times story:

East and Gulf Coast ports begin early contract talks

Officials of East and Gulf coast ports have begun talks aimed at a new contract with organized port workers more than three years before the current agreement expires, according to the Wall Street Journal.

The United States Maritime Alliance Ltd., known as USMX, which represents the employers of roughly 15,000 East and Gulf Coast port workers, has opened up the discussions with the International Longshoremen’s Association. The ILA is the largest union representing East and Gulf coast dockworkers, according to people briefed on the talks.

ILA spokesman Jim McNamara has confirmed that the union has had "exploratory talks" with management.

In past years, USMX and ILA have reached a master agreement that is supplemented by individual agreements between union locals and employers at separate ports. The contract agreed to in 2013 expires Sept. 30, 2018.

The talks are in preliminary stages, McNamara said, and an agenda is unlikely to be set until after the ILA’s annual conference, to be held in July in Puerto Rico. The USMX approached the union several months ago and ILA President Harold J. Daggett and other union leaders discussed resuming talks about a contract renewal in an all-day meeting May 20 with USMX Chairman and Chief Executive David Adam.

McNamara said contract negotiations are likely to include compensation for longshoremen who have lost work to increasing port automation, maintenance of the ports’ chassis — the undercarriages that hook up to trucks and carry shipping containers — health care benefits and the union’s jurisdiction in ports like Charleston, S.C. and Savannah, Ga., where many crane operators and other dockworkers are nonunion state workers.

For more of the Wall Street Journal story:

CMA CGM launches new West Africa service

French shipping giant CMA CGM Group launched a new service. The WAZZAN service will join Morocoo to North West Africa, and improve its Intra African coverage.

CMA CGM says the service improves its transit time between Mauritania, Senegal and Morocco by 8 days. The previous transshipment calls are being replaced by direct calls. The service introduces a new direct call, from North West Africa to Morocco, in Las Palmas.

WAZZAN also develops the shipping line’s reefer containers offering in Nouadhibou, Mauritania, allowing fish exports to intra African and worldwide markets.

This weekly service, complementary to the six EURAF services to West Africa and Europe, will deploy three 1,100-TEUs vessels, according to the statement.

The WAZZAN service rotation is: Casablanca, Algeciras, Tangiers, Nouakchott, Dakar, Nouadhibou, Las Palmas, Casablanca. CMA CGM reports first rotation will start from Algeciras, with the MV Delmas Swala, on June 6th, 2015.

Alibaba partners with All Cargo Logistics on LTL shipments

India’s All Cargo Logistics has made a deal to provide logistics services to e-commerce giant Alibaba.

The move will help the Chinese firm make faster deliveries to customers, including those in India.

"Our overseas subsidiary company has entered into an arrangement with Alibaba for providing its logistics services in China region…Players in e-commerce business have never been a customer of the company and with an intent to leverage the benefits of e-commerce into our business, the company has tied up with Alibaba in logistics space," All Cargo said in a filing with the BSE.

Per the arrangement, All Cargo will provide its logistics services to Alibaba for transporting Less than Container Loan consignments from China region to rest of the world. The logistics company works with customers across sectors like pharmaceuticals, healthcare, FMCG, engineering, textile, IT, oil and natural gas power, windmills, and manufacturers.

Earlier this year, Alibaba Group had entered the Internet business in India by buying stake in One97, owner of Paytm that facilitates online bill payments.

For more of the Economic Times story:

Containers fall into bay at Port of Los Angeles

Five stacked cargo containers fell from a ship into the water at the Port of Los Angeles.

Los Angeles Fire Department spokesman Brian Humphrey says the accident happened at Berth 402, operated by APM Terminals. He said fireboats were called to assist late Tuesday morning. Port police are also on the scene.

The containers were still connected as they floated alongside the ship. One container was dented in.

Authorities say nobody was hurt in the incident. APM did not immediately return a call seeking information.

For more of the KTVN2 story:


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